With Sales Slumping, Renault Samsung Slashes Output

Renault Samsung curtails production at its lone Busan, South Korea, assembly plant because of excess inventory resulting from dismal domestic and overseas sales.

The facility shut down Friday, June 8, and will operate three days a week starting June 15 through the end of the month, hoping to reduce the glut of finished cars. During that period, the plant will run only Tuesdays through Thursdays, a spokesman confirms.

Renault Samsung reports global sales tumbled 37% in May compared with year-ago, with just 12,373 deliveries. Exports slid 34% and domestic sales plunged 42%.

In addition to the scaled-back plant schedules, the auto maker pegs its 2012 domestic-sales target at 110,000 units, equal to the poor showing of 2011, when the home market saw deliveries drop 30% to 109,221.

No projection for this year’s export sales has been made. Overseas shipments were up 19% to 137,738 units in 2011, but had been much higher on a percentage basis before a sharp 35.1% plunge last November.

Renault Samsung shuttered the Busan plant for 10 days in December after dismal domestic and overseas sales left it with bloated inventories. Global sales for all of 2011 were down 9%, to 246,959 units.

After returning to normal production through this year’s first three months, the Busan plant was closed for four days in April and four more days in May to manage vehicle inventory.